The Portland daily press., 1887-03-16
Western Farm Morteages.

To the Editor of the Press:
In an editorial in your paper this morning
headed sWestern Farm Mortgages" permit
moto say that l think your statement "The
proposition now before the legislature to al
low savings banks to invest in Western farm
mortgages is an exceedingly dangerous one''
is statement which had you been familiar
with the experience of New Hampshire saw
ings banks and those Of other neighboring
States, in this class of securities, you would
not have made.
The New Hampshire savings banks COM
mlssioners in recent report, speaking of
Western farm mortgages, stated that "This
class OF loans now aggregates over ten mil
lions ($l0. O0O, 900 of dollars about one-half
OF the entire deposits in New Hampshire
banks which is exclusive of loans on mort
cages on city property" and they further
say that The commissioners have been una
BILE to discover, in all these Western loans,
any loss thus far to the several banks, either
on account Of the payment Of the principal
or interest," and | challenge you to produce
a record where corresponding large amount
has been invested in any other class of So
curitles outside of government, State or
municipal bonds, with as good results.
The writer has never seen the bill referred
TO now pending before the Legislature, but
it is not to be supposed that any bill would
be Introduced without stating that the in
vestments shall be made through certain
corporations who shall have a stated
amount of paid-up capital, and who shall
become responsible for their loans to a GER
tain extent. With restrictions of this kind
there can be no doubt but law to allow our
savings banks to invest a certain per cent.
OF their deposits in Western securities
would be benefit to all concerned
Very respectfully, p
The State Of New Hampshire has been
guilty of good deal of foolish legislation.
The valued policy law which has driven
out all the insurance companies is one in
stance, and the law that allows savings
banks oinvest in Western farm mortgages,
unless it is much better guarded than the
bill introduced into our Legislature will
eventually turn out to be another. 1t would
seem as If it must be obvious to everybody
that to allow holders of trust funds to invest
them in property Of which personally they
have little or no knowledge and concerning
which they can get but little information
except through the medium of interested
parties must be a dangerous experiment.
We venture to say that Mr.. Emery would be
slow to invest in these farm mortgages I'M
til he had made either personal investiga-
N'A " oio PioPcIty OH WHICH Lney are
founded or employed some person whom he
knew and had confidence in to do so for him.
This talk about companies guaranteeing
these mortgages amounts to but very little.
1t is just as difficult to find out about them as
about the property. Mr.. Emery is probably
aware that within year or two people in
thfsState have placed large insurance risks
in companies which were good for nothing,
but which nevertheless had all the outward
appearance of responsibility and strength.
There is no demand on the part of savings
banks to be allowed to invest in these mort
cages. On the contrary the largest banks
are opposed to it. Bank Examiner Richards,
who has examined this class of securities
pretty carefully, is also opposed to it. The
pressure on the Legislature comes from the
would-be borrowers and their agents, and
not from the lenders.]